What to do with the wood?

I purposely avoid too much comment on the health (or lack thereof) of the forestry industry in New Brunswick. It’s a complex mix of global market considerations, environmental issues, government policy, energy policy, trade regulation and overall industry trends.

But I have long wondered why with all the yakking about “value add”, something like 96% (a number I heard recently) of NB forests are chopped down and sent out of the province with very little value added.

Read this statement from the article carefully. It sums up my thinking – not just on forestry but all sectors where we want to compete:

As a late entrant into the game of using design to add value to natural resources, British Columbia should look to the remarkable success story of the Nordic countries. Up against strong competition from such low-cost lumber producers as Russia, Brazil and yes, Canada, Nordic governments, universities and corporations made long-term investments in the support of design-intensive industries. Sweden’s IKEA may be the most well-known of these, and it smarts to realize that British Columbia’s raw forest bounty occasionally gets shipped to them, only to return to us as finished furniture in their huge retail stores.

Those words dance off the page for me.

For the high end of the furniture market, the real Nordic design success story is Denmark, a more useful model for B.C., because we have very high labour costs, and have missed the economies of scale of behemoths like IKEA. Lacking the forests and other raw materials of other Nordic nations, since the Second World War, Denmark has first trained, then helped market the creations of three generations of designers, and has made a lot of money doing so. Danish design is so advanced that Sweden’s IKEA and Finland’s Nokia both base many of their design departments around Copenhagen.

Hallelujah! Read and digest!

Oh, by the way. This article wasn’t published in an economic development journal or even on the business pages of the Globe. It is published in the Real Estate Marketplace section of the newspaper.

The irony abounds. It is likely that nary an economic development official or government policy maker would ever even read that section of the paper and it contains the framework for successful economic development policy.

I would say that Marwood (http://www.marwoodltd.com/) is a good example of what can be done in the forestry sector. They are developing products to sell and not simply selling lumber. I would like to see it taken many steps further in the value added chain but it is a start.

I just hope that the rise of the Canadian dollar isn’t hurting them too badly. We need more companies like them around.